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On June 21, the United States District Court in Oregon dismissed
a plaintiff's class action complaint alleging his potential
employer violated the disclosure and pre-adverse action
notification requirements of the Fair Credit Reporting Act
("FCRA").
Plaintiff Daniel Walker applied for employment with defendant
Fred Meyer, Inc. As part of the application process, Fred Meyer
provided Walker with a disclosure form and an authorization form
regarding its intent to procure a background report on Walker.
Thereafter, Fred Meyer obtained from a background screening company
a report that contained negative information on Walker. Fred Meyer
provided a pre-adverse action notice to Walker, explaining that he
could contact the background screening company about issues
regarding the report.
The Court's well-reasoned opinion laid out Walker's baseless
arguments and then systematically dismantled them. Walker claimed
the consumer report disclosure language was overshadowed by
information about investigative consumer reports, which differ from
general consumer reports. Fred Meyer's disclosure mentioned
both reports in the single initial disclosure without
distinguishing between the two. However, the disclosure then set
out a consumer report disclosure and did not mention a potential
investigative report until the final paragraph, which stated
"If [the background screening company] obtains any information
by interview, you have the right to obtain a complete and accurate
disclosure of the scope and nature of the investigation
performed." Contrary to Walker's argument, the Court found
this sentence in fact emphasized that the disclosure was not itself
an investigative report disclosure.
Likewise, the Court rejected Walker's claim that the
authorization form was unlawful because it was "riddled with
extraneous information." The Court differentiated the
requirements for the authorization and the disclosure, noting that
the statute does not require the authorization to consist solely of
the authorization. The Court also found presenting the disclosure
as a separate document along with the authorization "did not
destroy the stand-alone character of the disclosure."
Walker's pre-adverse action notice claims did not fare any
better. Walker claimed Fred Meyer violated the statute by only
directing him to discuss his report with the background screening
company. Although the Court found he had Article III standing to
bring this claim, it rejected the argument on the merits. The Court
found no support suggesting that Fred Meyer's notice violated
the FCRA because it did not inform Walker he could contact the
employer directly, or the date by which he must do so.
This opinion highlights the importance of carefully following
the requirements of the FCRA when obtaining a background report on
prospective employees. Fred Meyer defeated Walker's claim
because it provided disclosure and authorization notices in
separate documents, apart from a job application or employee
manual.
The Troutman Sanders' Consumer Financial Services
Law Monitor blog offers timely updates regarding the financial
services industry to inform you of recent changes in the law,
upcoming regulatory deadlines and significant judicial opinions
that may impact your business. To view the blog, click
here
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This guest post is from long-time friend of the blog Bill Childs, from Bowman & Brooke, who also wishes to thank Elizabeth Haley for research assistance.
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